Known as the “king of spices”, black pepper is native to India, with Kerala accounting for 60 per cent of production in the country, followed by Karnataka and Tamil Nadu.

The country has over 2 lakh hectares of area under pepper cultivation, but pepper yields are the lowest in India. Global production of pepper is pegged at 3.2 lakh tonnes in 2013, down from 3.3 lakh tonnes in 2012.

The reduction will primarily be on account of a lower harvest in Vietnam (the world’s largest producer) and Indonesia. India’s pepper production is likely to be down by 30-40% in this season in major production pockets on account of heavy rainfall.

Indonesia was the major supplier of black pepper to the US market, shipping 20,423 mt (47%), followed by Brazil 8,715 mt (20%), Vietnam 7,963 mt (18%) and India 5,600 mt (13%). These four countries account for a share of 98% of whole black pepper to the United States. Export of Indian pepper in 2012-13 came down by 40 per cent compared to the previous year. While the country shipped 26,700 tonnes of pepper in 2011-12, exports fell to 16,000 tonnes in 2012-13. India's pepper export during April-August 2013 period was 8,000 tonne valued at around Rs 330 crore.

The Indian parity in the international market is at $8,750 (c&f) for the Europe and $9,000 a tonne (c&f) for the US. Indonesia, another major producer, is not active in the market as its production has been low this season. The largest producer Vietnam seems to have exhausted its stock. The global stock is likely to remain tight for the rest of the year as Vietnam and Indonesia are having thin stocks.

Vietnam's crop is considered to be good and the new crop is expected to hit the market during early February. The light berries have started arriving already. Vietnam has started booking at rates $8,200 per tonne for January, which is about $600 lower than Indian prices. To sell at that rate, Indian prices in the local market will have to come down by at least Rs 40 a kg from the current level of Rs 510-520 a kg.

At the same time, good quantity of light pepper is being traded in the southern districts of Kerala where the extraction/pepper in brine units are buying at Rs 540-550 a kg. Meanwhile, Karnataka is also offering small quantity of pepper at Rs 530 delivered anywhere in India. On the NMCE, January and February contracts decreased by Rs 184 and Rs 444 respectively to Rs 52,790 and Rs 53,410 a quintal. Turnover fell to 13 tonnes while net open position remained unchanged at 22 tonnes.

The NAIP – Market Intelligence Center of the University of Agricultural Sciences, Bangalore collected data on Black pepper prices from Sakaleshpur market for the last eleven years and using econometric analysis and trader’s survey, the prices are predicted up to March 2014. The prices of black pepper are likely to hover around Rs.515-530 per Kg during January- February 2014 and Rs.520-540 per kg in March 2014. Hence, farmers are advised to take suitable selling decisions. The prices are likely to increase marginally during off season.

Research team

Dr.C.P.Gracy, Jyoti Naik, Nagashree,N.

Department of Agricultural marketing co-operation and business Management